Tuesday, March 18, 2014

Debts to myself

Debt and Savings sort of mean the same thing to me in the sense that they are money or resources set aside to pay for something. The difference may be in the timeframe; debt, you're paying back a past purchase; savings, you're paying forward for a future purchase.

I'll confess, I have not been a very good saver, which may contradict with my achievements thus far. About 3 years ago, after fighting to lower my first credit card and ringing it back up every month, I decided that I just didn't have a "saver's mentality". I couldn't just have money sitting there, even if I had the best intentions. I swear that during those first months, things would just keep happening, without fail, that would sweep any saved money away. That is, until I declared any extra money a debt to myself disguised as a goal of $1k. After that, things would still happen, but if I touched that money I had "saved", I would replace it with the same force I would pay off credit card debt. In turn, I'd be a lot more inclined NOT to dip into that saved money, and would find other ways to deal with things as they come. What can I say? It worked.

My checking account was through ING Direct (now CapOne360), same as my two savings account. Sure, it was nice to have it all easily accessible from one place, but it was also not helping my cause to have transferrable money so close at hand where they could mingle if I was not careful. That's when I opened an Ally account and tossed my EF there. Now it felt like it was truly out of reach and safe from everyday shortcomings. I created my EF 'debt', to pay for emergencies that may arise in the unforeseeable future, a car fund to lower my monthly bill when I do get a car at some point, vacation, Christmas funds... it was working! Success!

Today, I am on round two of such struggles; though I have all of my "long-term debts"/savings stashed away at my Ally account, I have a $500 slush fund residing in my CO360 savings account. For months, I've tried to keep it there and build it up. I started putting in my PT job's checks in there, but things would happen every time to wipe it clean. I would love to have a base safety net within my checking account for such emergencies, but I have to admit I am not doing a good job at it.

Does anyone else have a similar outlook about savings? I know it seems like I'm just playing with semantics, but I do think that my debt monies are really jailed once committed to a goal, and I have a hard time breaking them off, even if that means using my CC with no intention of paying it in full within the current check. I could see how that could become a problem.

7 comments:

  1. My problem is once money is moved to savings I hate to touch it. Even if it was set aside for something in particular it makes me sad to see it go. I set aside $250 every month for anything extra that comes up. It helps me not to have to keep moving money out of savings. Although since I know its available, I seem to always find something to spend it on and never have any left over at the end of the month

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    1. I've been cringing BIG time at "losing" my $4k car down payment... it is over 80% of my cash reserves. Ouch! I was talking myself out of making a big down payment and just bearing with slightly larger payments going forward. Hope I don't sell myself out...

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  2. I'm like you, I have to keep my savings out of reach or I will touch them / use them. I keep that money at Discover Bank and it takes 5 days if I want to transfer it, so well out of reach. I do keep $1,000 on my bank of america savings and that's for emergencies only- I've had it there since 2006 and have never really used it, most emergencies end up on the cc.

    HS

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    1. You know, I didn't consider BOA... it is easily accessible to me in case of an emergency. But their interest (even if it's cents) suck. And I don't like BOA that much anyway... that is a good idea to consider, regardless. Thanks for mentioning it!

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    2. The 1000 is actually a checking that I call savings- doesn't pay any interest.

      HS

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  3. I actually have two checking accounts. One earns better than average interest if I do direct deposit and 12 debit card transactions each month, so I keep my emergency fund there. Every month I direct deposit $120 and do my 12 transaction of less than $10 (coffee, lunches out, etc.). That's the ONLY thing I use that account for and once I have hit my 12 transactions or spent my monthly $120 I stop using the debit card. My other checking account gets rest of my paychecks, autopays the mortgage, and I transfer money to long-term savings and to pay off the credit cards each month.

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  4. I actually do the same thing as Janelle, well she gave me the idea a little while back so I am a copy cat. But I don't think she minds that I am a total copy cat. But it has been working.

    And cut yourself a little slack you my dear have kicked ass this year!!!!! Now did you buy yourself good shoes yet?

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